Due to the nature of HTML formatting there may be some formatting irregularities in the HTML version of the decision. These irregularities are not present in the original or the PDF version of the document which may be downloaded by clicking the "back" button and clicking on "New PDF attachement.".
Decisions containing images or diagrams are best viewed using the Adobe Acrobat PDF attachment if it is available.

Unpublished

UNPUBLISHSED

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF IOWA

WESTERN DIVISION

ELIAS GARCIA-MORENO,

Plaintiff,

No. C05-4017-PAZ

vs.

MEMORANDUM OPINION AND
ORDER ON DEFENDANTS’
MOTION FOR SUMMARY
JUDGMENT

GREAT-WEST LIFE AND ANNUITY
INSURANCE CO., a Colorado corporation,
and its Subsidiary, ALTA HEALTH & LIFE
INSURANCE CO., a Colorado corporation,

Defendants.

____________________

This is an action to recover life insurance benefits under an ERISA plan. The plaintiff
claims his son was a participant in the ERISA plan, and purchased life insurance under the
plan naming his father as the beneficiary. The plaintiff further claims his son died, and as
the beneficiary of the life insurance, he is entitled to insurance proceeds in the amount of
$15,000. The defendants claim they were not provided with sufficient evidence to establish
that the plaintiff’s son worked for the company or that the worker whom the plaintiff claims
was his son is dead.

The ERISA plan at issue (“the Plan”) was established for the benefit of employees of
Tur-Pak Foods, Inc. of Sioux City, Iowa (“Tur-Pak”). The defendant Alta Health & Life
Insurance Company (“Alta”) provided life insurance benefits under the Plan. The defendant
Great-West Life and Annuity Insurance Co. (“Great West”), Alta’s parent company, was the
Plan administrator.

An employee of Tur-Pak known to the company as Juan Alberto Chavez (“Chavez”)
enrolled in the Plan effective May 1, 2003. On the enrollment form, “Chavez” listed his
Social Security Number as XXX-XX-2240, and his date of birth as September 30, 1980.
Chavez named “Elias Garcia,” described on the form as his “frend [sic],” as his beneficiary.

The plaintiff Elias Garcia-Moreno (“Garcia-Moreno”) was the father of Orlando
Garcia. On October 22, 2003, Garcia-Moreno filed a claim under the Plan for $15,000 in life
insurance benefits arising from the death of Orlando Garcia. On the “Life Claim Report”
form, Garcia-Moreno stated his son was known to Tur-Pak as “Juan Alberto Chavez.” Great-West’s records indicated a “Juan Chavez” was eligible for a $15,000 life insurance benefit.
Garcia-Moreno stated his son had died on June 19, 2004. On the form, Garcia-Moreno listed
his son’s Social Security Number as XXX-XX-1394, and his son’s date of birth as
January 18, 1980.

On November 14, 2003, Garcia-Moreno sent Great-West a Certificate of Death which
reflected that his son Orlando Garcia was born on January 18, 1980, and died from “ligature
strangulation by hanging” in Woodbury County, Iowa, on June 19, 2003. According to the
Certificate, Orlando Garcia had no Social Security number and he was twenty-three years old
at the time of his death. The decedent’s body had been sent to Mexico for burial. On the
Certificate, the decedent’s father was listed as “Elias Garcia.”

On November 21, 2003, Casey Sierota, a Senior Claims Examiner with Great-West,
wrote the following to Nathan Phipps, the HR Manager at Tur-Pak:

We regret to learn of the death of Mr. Chavez[] and wish to
express our sincere condolences to his family and friends.

This claim will be reviewed within the next two weeks. It was
noted upon receipt of the claim that the enrollment/beneficiary
form was not enclosed. We would appreciate your sending this
form for our review. You will be notified if any further
information is needed. If you have any questions, please contact
me at [phone number].

In a claim note dated December 1, 2003, Sierota wrote the following:

[The death claim] is for Orlando Garcia whose DOB was
1/18/80. Claim form is for Juan Chavez, DOB 1/18/80.
Document copies were sent under both names with pictures
similar enough to indicate this is the same person. No
[enrollment form] sent to us but requested from [Tur-Pak] in the
10-day letter. The Member Information screen however, offers
Juan Chavez’s DOB as 9/30/80. When [the enrollment form]
arrives, will check the birth date on form and request affidavit
from [Phipps] that states their employee’s actual name was
Orlando Garcia. Discussed this with Carrol Lone who agreed
this is the same person and directed to pay.

In a claim note dated December 1, 2003, Sierota wrote, “Rec’d orig [enrollment form] from
[Tur-Pak]. As the names are different and birth dates are different, wrote to [Tur-Pak]
requesting a notarized affidavit from him regarding the name.”

In a claim note dated December 18, 2003, Sierota wrote the following:

Rec’d [telephone call] from [Phipps]. He said he thinks his
[employee] is the same person as the man who died, but he
cannot be sure. After the death, several [employees] started a
collection in the lunchroom for the family of the deceased and
the sign they put up had the name of the DC (Orlando Garcia)
rather than the name he knew the [employee] by (Juan Chavez).
He is not comfortable, however, with offering an affidavit that
this is the same person as he is not positive. He said he would
write a letter expressing everything he’s said in this phone call,
but would not give an affidavit or request that we pay the claim.
He would rather we deny the claim as he is afraid it might set a
precedent with workers when a family member dies, they will
claim it was the employee, collect the insurance and move back
to Mexico. Will wait for this letter and then deny claim.

On December 5, 2003, Sierota wrote the following to Phipps:

Thank you for sending us the enrollment form for Mr. Chavez.
As I’m sure you are aware, we have an issue with this claim
regarding the identity of the deceased. All of the employment
documents refer to Juan Chavez whose birth date was
September 30, 1980. The death certificate, however, is in the
name or Orlando Garcia whose date of birth was January 18,
1980. The beneficiary named on the enrollment form is Elias
Garcia whose relationship to Juan Chavez was given as “friend,”
while the death certificate states Elias Garcia was Orlando’s
father.

If we are to pay this claim, we must have a notarized affidavit
on which you state that your employee Juan Chavez’s true name
was Orlando Garcia and that these two identities belong to the
same man. If you have any questions, please contact me. . . .

In a claim note dated January 7, 2004, Sierota wrote, “[Phipps]’s letter has not arrived.
Apparently he changed his mind about putting anything in writing. Will go ahead and deny
claim, sending referral to Carrol Lone.”

In an internal memo dated January 8, 2004, Sierota wrote the following to Carrol
Lone:

Employee enrolled as Juan Chavez. Death Certificate is for
Orlando Garcia. We have no documents that prove these
identities belong to the same person. Spoke to the employer
who said he thinks they’re the same, but is not sure enough to
sign an affidavit. In fact, he would be more comfortable with
our denying the claim. He is afraid this might be a case where
a family member died and they’re claiming the insurance
benefits under the employee’s name and the employee is
returning to Mexico with the money. He does not want to set a
precedent as he has a lot of Mexican workers whose families are
here with them. He said no one in management went to the
funeral, so they can’t be sure it was their employee who died.

Despite this note, the administrative file contains an undated affidavit directed to Sierota
and signed by Phipps stating the following:

Juan Chavez (XXX-XX-2240) was an employee from 4/10/02
until 6/20/03 when he had been a No Call No Show for the
week. Other employees told me that he had hung himself the
prior weekend. There was a coffee can in our cafeteria with his
picture looking for donations to help cover expenses with the
name of Orlando Garcia on the can. Hourly employees of Tur-Pak set this up. I believe that Juan Chavez and Orlando Garcia
is [are] the same person but I do not have any first hand
information to verify this. If you have any questions feel free to
call me at [phone number].

In a handwritten note dated January 12, 2004, on the bottom of the January 8, 2004, memo,
Lone wrote, “Agree, we do not have proof of death for Juan Chavez.”

On January 9, 2004, Sierota wrote the following letter to Garcia-Moreno:

We regret to learn of the death of Mr. Garcia and wish to
express our sincere condolences to his family and friends.

The employee insured for Life Insurance under this Plan was
Juan Chavez whose birth date was September 30, 1980. His
Social Security Number was XXX-XX-2240. He listed his
beneficiary as Elias Garcia whose relationship to him was
“friend”. The death certificate we received is for Orlando Garcia
whose date of birth was January 18, 1980. A Social Security
Number was not given. Both the death certificate and the claim
form state that Elias Garcia was his father.

As none of the documents received contain the same
information, we have no assurance that Orlando Garcia was the
same person as the employee of Tur-Pak Foods, Inc. who was
known to them as Juan Chavez. As we are unable to determine
that Orlando Garcia did, in fact, work for Tur-Pak Foods and
was insured through their Plan, we regret that we are unable to
pay any Life Insurance benefit.

If you do not agree with this determination and wish to appeal,
the Employee Retirement Income Security Act (ERISA)
requires that you formally appeal our denial in writing within 60
days from the date you received this letter. The appeal must
state the reasons you feel the claim should not have been denied
and include any documents not previously provided, including
documentation which supports the beneficiary’s claim that Juan
Chavez and Orlando Garcia were the same person, and other
information to show the plan provisions have been adhered to.
If you desire to pursue an appeal, please be advised that you are
entitled to review the pertinent documents upon which this
decision was based. Upon request and free of charge, copies of
all documents relevant to this claim will be provided to you.

Your appeal will be processed within 60 days of the date the
request is received. If a decision cannot be made within the
initial 60 days period, because of circumstances beyond our
control, we will notify you in writing of the reasons for the delay
and the specific date that we expect to make a claim decision.

On January 12, 2004, a computer “person search” was performed by Great-West, and
it was determined that Juan A. Chavez, date of birth September 30, 1980, Social Security
Number XXX-XX-2240, was alive and living at an address in Soledad, California.

On February 16, 2004, attorney Dennis M. McElwain sent a representation letter to
Alta appealing the denial of the claim and requesting a copy of the administrative file. In the
letter, McElwain state, “Once we receive your response, we will determine what if any
further documents will be submitted to you.” On March 19, 2004, Great-West sent
McElwain a letter enclosing the Certificate of Death for Orlando Garcia, the Life Claim
Report sent to Great-West by Tur-Pak, and the Enrollment Card completed by “Juan A.
Chavez.” In the letter, Great-West stated, “From the [enclosed] documents we have no proof
that Juan A. Chavez is one and the same person as the deceased Orlando Garcia and must
maintain our denial of this life insurance benefit.” Great-West concluded the letter by
advising McElwain of his right to seek a second review within 60 days, stating, “This appeal
must include certified proof that Orlando Garcia and Juan Chavez are one and the same
person and certified proof that Juan Chavez, our insured, died.”

On December 14, 2004, attorney Jay M. Smith from McElwain’s office sent Great-West and Alta a letter enclosing a copy of a suit papers. In the letter, Smith stated he was
prepared to file the lawsuit if the case was not settled by December 17, 2004. On
December 16, 2004, Sharon A. Riley, Associate Counsel for Great-West, wrote the following
letter to Smith:

We are in receipt of your December 14, 2004
correspondence and attached Complaint. . . . Despite the
allegations set forth in the Complaint, Great-West’s decision to
deny your client’s claim was proper.

First, as reflected on the enclosed Beneficiary Designation Form, Juan Chavez’s date of birth is September 30, 1980
and his social security number is XXX-XX-2240. The
Beneficiary Designation Form does not indicate an alias or
secondary name of “Orlando Garcia.” However, the death
certificate provided by your client indicates the death of an
individual by the name of “Orlando Garcia,” with a date of birth
of January 18, 1980. Moreover, the certificate does not include
a social security number to compare to the social security listed
on the Beneficiary Designation Form. As such, there is
insufficient evidence to demonstrate that the individual reflected
on the death certificate (Orlando Garcia) is in fact, the member
insured under the Tur-Pak Foods employee benefit plan (“the
Plan”) administered by Great-West (Juan Chavez).

In addition, Great-West conducted an investigation of
this claim, which revealed that Juan Chavez, with a date of birth
of September 30, 1980 and a social security number of XXX-XX-2240 was still alive and last residing in California. We also
compared a photograph of Orlando Garcia, with the date of birth
of January 18, 1980, to a photograph of the Juan Chavez who
was employed with Tur-Pak Foods. As you can see, the
photographs are not of the same person.

Finally, Mr. Chavez designated his beneficiary as “Elias
Garcia” and indicated his relationship to Mr. Garcia as “friend.”
. . . Therefore, even if it was proven that Juan Chavez is the
same deceased individual identified in the death certificate by
the name of Orlando Garcia, there is no evidence that your client
is the intended beneficiary. Pursuant to the death certificate,
Elias Garcia is the father of Orlando Garcia, and the Beneficiary
Designation Form would have indicated as such. Based on these
facts, Great-West properly denied Mr. Garcia’s claim for life
insurance proceeds.

Great-West is willing to re-evaluate your claim prior to
the filing of the lawsuit if additional information is provided.
Therefore, we ask that you submit any and all information and
documentation that can prove that the individual identified in the
death certificate as Orlando Garcia is, in fact, the individual
covered under the Plan. Moreover, any information that can
demonstrate that your client was the intended beneficiary would
also [be] beneficial.

On January 25, 2005, Garcia-Moreno filed a petition in Woodbury County, Iowa,
District Court seeking to recover death benefits from the defendants. The defendants
removed the case to this court on February 7, 2005, and filed an answer on March 30, 2005.
The parties consented to jurisdiction by a United States Magistrate Judge, and on June 20,
2005, Chief Judge Mark W. Bennett filed an order transferring case to the undersigned.

On October 13, 2005, the defendants filed a motion for summary judgment, a
statement of undisputed material facts, a supporting brief, and an appendix, which includes
the administrative file. On November 17, 2005, Garcia-Moreno filed a resistance to the
motion, with a supporting brief, a statement of material facts and response to defendants’
statement of undisputed facts, and an affidavit of the plaintiff. On November 22, 2005, the
defendants filed a reply brief.

The court heard telephonic arguments on the motion on November 29, 2005.
David M. Swinton appeared for the defendants. MacDonald Smith appeared for Garcia-Moreno.

The court has considered the parties’ submissions and arguments carefully, and turns
now to discussion of the issues raised in the motion.

I. ANALYSIS

A. Standards Applicable to Appeals of ERISA Claims to Federal Court

Great-West is plan administrator of an ERISA plan established for the benefit of the
employees of Tur-Pak. Great-West denied the plaintiff’s claim for life insurance benefits
under the Plan. “ERISA provides a plan beneficiary with the right to judicial review of a
benefits determination.” Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir. 1998) (citing
29 U.S.C. § 1132(a)(1)(B)). Under the terms of the Plan, Great-West is given discretion to
determine eligibility for plan benefits. When a plan administrator is given such discretion,
the court must review a decision by the administrator for abuse of discretion. See id. This
deferential standard reflects a general hesitancy by the courts to interfere with the
administration of ERISA benefits plans. Layes v. Mead Corp., 132 F.3d 1246, 1250 (8th Cir.
1998)

In Hunt v. Metropolitan Life Insurance Co., 425 F.3d 489 (8th Cir. 2005), the court
described this standard of review as follows:

Id., at 490. “A plan administrator’s interpretation of a plan does not constitute an abuse of
discretion so long as it is ‘reasonable,’ even if the reviewing court disagrees with the
interpretation.” Johnson v. U.S. Bancorp Broad-Based Change in Control Severance Pay
Program, 424 F.3d 734, 738 (8th Cir. 2005) (citing Neumann v. AT&T Communications,
Inc., 376 F.3d 773, 781 (8th Cir. 2004)).

In Smith v. UNUM Life Insurance Company of America, 305 F.3d 789 (8th Cir. 2002),
the court discussed application of the abuse of discretion standard, as follows:

In applying an abuse of discretion standard, the reviewing court
must affirm if a “reasonable person could have reached a similar
decision, given the evidence before him, not that a reasonable
person would have reached that decision.” Ferrari v. Teachers
Ins. and Annuity Ass’n, 278 F.3d 801, 807 (8th Cir. 2002)
(internal citation omitted). A reasonable decision is one based
on substantial evidence that was actually before the plan
administrator. SeeDonaho v. FMC Corp., 74 F.3d 894, 899 (8th
Cir. 1996). Substantial evidence is “more than a scintilla but
less than a preponderance.” Schatz v. Mutual of Omaha Ins.
Co., 220 F.3d 944, 949 (8th Cir. 2000). A reviewing court may
consider both the quantity and quality of evidence before a plan
administrator. Donaho, 74 F.3d at 900.

Id. at 794.

When considering a decision by a plan administrator to deny benefits under an ERISA
plan,

a reviewing court “must focus on the evidence available to the
plan administrators at the time of their decision and may not
admit new evidence or consider post hoc rationales.” Conley v.
Pitney Bowes, 176 F.3d 1044, 1049 (8th Cir. 1999). Because
ERISA requires employee benefit plans to “provide adequate
notice” to any participant or beneficiary whose claim is denied,
“setting forth the specific reasons for such denial” in a manner
“calculated to be understood by the participant,” 29 U.S.C. §
1133, we have held that plan trustees must “briefly state the
facts of the case and the rationale for their decision,” Brumm v.
Bert Bell NFL Retirement Plan, 995 F.2d 1433, 1436 (8th Cir.
1993) (internal quotation omitted), and we have refused to allow
claimants “to be sandbagged by after-the-fact plan
interpretations devised for purposes of litigation.” Marolt v.
Alliant Techsystems, Inc., 146 F.3d 617, 620 (8th Cir. 1998); see
also Short [v. Central States, Southeast and Southwest Areas
Pension Fund, 729 F.2d 567, 575 (8th Cir. 1984)]. In sum, an
administrator with discretion under a benefit plan must articulate
its reasons for denying benefits when it notifies the participant
or beneficiary of an adverse decision, and the decision must be
supported by both a reasonable interpretation of the plan and
substantial evidence in the materials considered by the
administrator.

Thus, the court’s task here is to decide whether Great-West’s decision to deny life
insurance benefits to the plaintiff, as justified in Great-West’s communications sent to the
plaintiff, was supported by substantial evidence in the administrative file.

B. The Merits of the Appeal

On June 19, 2003, Orlando Garcia hanged himself in Woodbury County, Iowa. A
Certificate of Death was prepared by the County Registrar of Vital Records, and his body
was sent to a cemetery in Mexico for burial. Orlando’s father, Elias Garcia, is the plaintiff
in this case. On the day after Orlando Garcia hanged himself, a worker at Tur-Pak known
as Juan Chavez failed to show up for work. Chavez’s co-workers told management that he
had hanged himself. A coffee can for donations, with the name “Orlando Garcia” on it, was
placed next to a picture of “Juan Chavez” in the company cafeteria. On “Juan Chavez’s”
enrollment form for the ERISA plan at Sur-Pak, he named Elias Garcia, his “friend,” as
beneficiary. “Orlando Garcia” and “Juan Chavez” both were twenty-three years old.

After Elias Garcia submitted a claim for life insurance benefits for the death of his
son, Nathan Phipps, the human resources manager at Tur-Pak, advised Great-West, the plan
administrator, that Juan Chavez actually was Orlando Garcia. In claim notes written by
Casey Sierota, an assistant claims examiner with Great-West, Sierota states that photographs
of Juan Chavez and Orlando Garcia were “similar enough to indicate this is the same
person.” On December 1, 2003, Sierota discussed the matter with Carrol Lone, an assistant
manager of Group Life Claims, and they “agreed this is the same person” and directed that
the claim be paid.

All of the above facts are undisputed. In fact, they come directly from the defendants’
administrative file. Despite the apparent favorable resolution of the claim, the claim was
denied. In a claim note date December 18, 2003, Sierota wrote that Phipps was “not
comfortable” with providing an affidavit attesting to the fact that Juan Chavez actually was
Orlando Garcia, but Phipps would write a letter instead. In the note, Sierota stated Phipps
“would rather we deny the claim as he is afraid it might set a precedent with workers when
a family member dies, they will claim it was the employee, collect the insurance and move
back to Mexico. Will wait for this letter and then deny the claim.” On January 7, 2004,
Sierota wrote in another claim note that Phipps’s letter had not arrived, so Sierota was going
to “go ahead and deny the claim.” Later, Sierota received an affidavit from Phipps.

From these facts, the only reasonable conclusion is that Orlando Garcia worked at
Tur-Pak under the name of “Juan Chavez”; Chavez is a California resident and has a valid
Social Security Number; Orlando Garcia used Chavez’s Social Security Number and birth
date to obtain employment; and he listed his father as the beneficiary of his life insurance
policy, but on the paperwork identified his father as his “friend” to avoid having to explain
the fact that his father was named “Garcia” and he was named “Chavez.” Great-West
realized this, and decided to pay the claim. Then Phipps, the human resource manager at
Tur-Pak, became nervous and asked Great-West not to pay the claim. Phipps was afraid
other Mexican workers would see this situation as an opportunity to defraud the company.
Rather than face that possibility, Phipps and Great-West decided to deny the claim. Great-West performed an about-face, and denied the claim.

The defendants argue their decision to deny the plaintiff’s claim was supported by
substantial evidence. The defendants cite the following facts in support of their argument
that a reasonable person could have reached the same decision:

1.The decedent listed in the death certificate had a
different name than the enrollee.

2.The decedent listed in the death certificate had a
different date of birth than the enrollee.

3.The claimant’s name is not the same as that of the
beneficiary identified in the enrollment form.

4.The alleged relationship between the claimant and
the decedent was not the same as that between the enrollee and
the beneficiary identified in the enrollment form.

5.An investigation disclosed the existence of a Juan
Alberto Chavez who was still living in California with the same
social security number as that listed in the enrollment form.

6.The plaintiff never submitted any information in
support of his contention that the decedent and the enrollee were
the same person, despite having been invited to do so on three
separate occasions prior to the filing of the lawsuit.

See Doc. No. 9-3, p. 6. These facts, taken together with the other evidence in the
administrative file, only support the plaintiff’s claim.

From any reasonable interpretation of the evidence in the administrative file, there is
only one possible explanation for what happened in this case. The employee who worked
at Tur-Pak under the name “Juan Chavez,” signed up for benefits under the Plan, and then
hanged himself, was not, in fact, Juan Chavez. Juan Chavez is alive in California. Instead,
the employee known to Tur-Pak as Juan Chavez was Orlando Garcia, the plaintiff’s son.
Garcia was an illegal alien who used false identification documents belonging to Chavez, an
Hispanic male of about his same age, to work in the United States. When Garcia went to
work for Tur-Pak, he used Chavez’s date of birth and Social Security Number for the
paperwork, but when he designated a beneficiary for his life insurance benefits, he named
his father. On the insurance paperwork, he identified his father as his “friend” rather than
his father because he was using the name “Chavez” to work, and his father’s name was
Garcia. He did not state his true relationship to his father on the paperwork because if he had
done so, it would have been evidence that he was working under a false identity.

The claim representatives at Great-West did not really dispute this interpretation of
the evidence when the claim first was submitted. Both the senior claims manager handling
the claim and the assistant manager of Group Life Claims agreed Chavez and Garcia were
the same person, Garcia had died, and the claim should be paid. When the Human
Resources officer with Tur-Pak refused to provide Great-West with an affidavit, and
indicated he would rather Great-West deny the claim because he was “afraid it might set a
precedent with workers when a family member dies,” Great-West immediately, without
considering any further evidence and without any reasonable justification, changed its
position and decided to deny the claim.

The court finds Great-West abused its discretion when it denied the plaintiff’s claim.
From the facts in the administrative file, no reasonable person could have reached a similar
decision. The decision was not supported by substantial evidence, but instead, was reached
at the behest of the employer to avoid setting a “precedent.”

II. CONCLUSION

The court denies the defendants’ motion for summary judgment, reverses the decision
of the plan administrator denying life insurance benefits to the plaintiff, and orders the
defendants to pay $15,000 in life insurance benefits under the Plan to the plaintiff. Judgment
will be entered in favor of the plaintiff and against the defendants.